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Ghana’s Rental Market is W-O-N-D-E-R-F-U-L

4bedroom house with a swimming pool – $66,000 for 1 year of rent payable in advance — in North Ridge

Looks like I’m in the market for an apartment. Again.

Despite the Ghanaian real estate boom of the last several years, the Ghanaian real estate market is not attractive for expatriate (expat) renters. Real estate developers have been building for the African real estate investor who have a distinctly African mindset for housing.

One of the key differences between the Ghanaian real estate market and the American one is that rent is typically paid 12 months in advance. Thus, when you look at the listings on GhanaFind or Tonaton, you have to take whatever number is there and multiply it by 12. Thus, a $800 per month apartment requires a $9,600 upfront payment; a $1,500 apartment is $18,000. There are houses in East Legon going for $3,500/month or $42,000. Seriously! Who should pay that when you can get a down payment on a house in Texas for that type of money? If you hire a broker, then you’ll need to pay an additional month for a broker fee.

Africans like space. A house is a long-term investment for the family where traditionally everyone in an extended family stayed. Thus, a typical house may be 4, 5, 6, 7 or more bedrooms because there will be multiple families staying there. (My understanding is that the demand for these gigantic houses is waning for young, professional couples.) I believe that these houses are typically being built for expatriate Africans who intend to return to Ghana for their golden years and the relatively small minority of Africans who are returning to work in Ghana. The glut of homes exceeding $300,000 for these traditional homes suggests that there is a shortage of demand for this type of product.

Expatriates from the US, Europe, China, and India, don’t need that much space. Typically, a man has gotten a contract to work here or start up a company here. He comes alone and visits his wife and/or family abroad every few months. Those working for large oil or mining companies are lucky because their companies are willing to pay top dollar for accommodation.

Those starting their own companies — like myself — have to foot the bill themselves. They have to balance capital for their business against finding a place in a safe and secure location. For people like myself, there is a dearth of studio and 1BR apartments that meets Western living standards. I definitely don’t need a house! Three bedrooms is too much; 2 bedrooms seems like an awful lot of room.

Let me define that. “Western living standards” means security arrangements — high wall, electrified fence, guard; a generator set for Ghana’s frequent brown-outs; modern appliances and toilets; hot water heater for showers. I don’t think it’s too much to ask to have hot water nor air-conditioning at night. I can’t sleep when the temperature is 95-100 degrees F in my room without a fan. For times like those, I almost think it’s better to sleep outside.

Given the practice of paying 12 months in advance, many start-ups simply convert a room or rooms into office space. It’s simply too expensive to have an apartment and an office in two separate locations. Office and retail space owners sometimes will ask for more than 1 year rent upfront — I’ve seen listings for 10 years upfront! The reason for this rent upfront practice is that Ghana’s laws are actually tenant friendly. Thus, a person can squat for years before being forcibly removed.

The only neighborhoods that meet my definition of Western living standards are the central and most expensive parts of town: Osu, Airport Residential, Cantonments, Ridge, East Legon. For every amenity you can live without, the price drops quickly. Thus, a 1BR apartment without security, generator, hot water, etc. can run you 150 cedis per month payable 2 years ($1,800) in advance in Osu. (In other parts of Accra, it could be as low as 50 cedis per month.) Just be prepared to have your place broken into because everyone will see that there is an obruni living there. They’ll assume you have a laptop, smartphone, and other goodies worth stealing.

Lastly, there’s always the risk that you’ll hand over your rent to someone who does not actually own the apartment/house. Thus, you may have to hire someone to be sure that the owner is the owner.

If things don’t go as I hope in the next couple of weeks, I think I will be paying up the equivalent of Hyundai for my rent next year. W-O-N-D-E-R-F-U-L.

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4 comments

Wow, I’m not too surprised to hear this, although I thought they would have more affordable places for Westerners. You don’t have other Western friends that you can split rent with? Or even African friends that you can be roomies?